Minnesota Power's largest customers oppose new gas plant

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Dive Brief:

Amost a dozen of Minnesota Power's largest energy customers are opposing the utility's plan to partner on a new natural gas plant, instead saying demand management strategies should be employed to avoid building capacity.

Minnesota Power, along with Dairyland Power Cooperative, want to construct a 525 MW to 550 MW gas-fired plant in Superior, Wis. The utility says the new plant will help boost the amount of wind and solar on the system, but Minnesota Power customers argue the new generation is unnecessary.

A group of 11 companies filing as Large Power Intervenors has suggested to Minnesota regulators that interruptible rates might be used to reduce demand at peak times.

Dive Insight:

Minnesota Power customers aren't buying the utility's need for a new power plant. Large companies like Boise Paper, United States Steel and United Taconite are suggesting demand management techniques might be used to avoid the $700 million investment. And residential customers are raising some of the same points.

The Duluth News Tribune reports the industrial customers make up two thirds of Minnesota Power's sales, and argued in a filing to the Public Utilities Commission that "because the existence of interruptible load allows utilities to avoid building or buying generation capacity to serve these loads, it can provide a win-win-win for the utility,."

The newspaper also published a reader column calling for demand response and lower-cost renewable energy. Minnesota regulators are taking comment on the proposal through March 23. Minnesota Power and Dairyland aim to have the plant online by 2025; the project is a part of the utility's push reduce its use of coal-fired generation.

In 2016, the utility announced it would retire two small coal units at its Boswell Energy Center in Cohasset, Minn., by the end of this year. The two units slated for retirement each produce 65 MW of power, with the remaining two total nearly 1,000 MW.